Housing Technology for Social Landlords

Investigating market dynamics

May 2023

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CONTENTS

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Executive summary

Issues with technology are a known problem in Local Authority housing services. LAs feel that they suffer from vendor lock-in, whereby they are unable to change from their “legacy” housing technology to newer systems that would better meet their needs.

Our research confirmed that poor systems usability and missing functionality is a key pain point for LAs, alongside limited integration between systems, which leads to data silos and impedes compliance reporting. These limitations have led to customisation and development of bespoke integrations, which in turn pose a barrier to upgrading systems - keeping LAs stuck in a vicious cycle. Other barriers to upgrade and switching systems include the high cost of procurement and time-consuming implementations.

We found that there are many housing technology products available from a multitude of suppliers, ranging from comprehensive housing management systems to niche product verticals. Yet despite this LAs perceive there to be low competition in the market. Public data shows that just three suppliers have won nearly 70% of competitive tenders since 2015.

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We heard that LAs are highly risk averse, preferring suppliers that they know are in use in other LAs even if they have a poor track record. LAs and suppliers often have transactional relationships, with minimal support or strategic forward-planning conversations.

There are surprisingly few public tenders per year compared to the size of the market, along with long contract terms, and a high proportion of renewals despite LAs low satisfaction with their providers. For those that do go to market, limited LA resources for procurement and implementation also contribute to a trend of consolidating systems, awarding larger value contracts to a single supplier.

Central government intervention will be required to improve market competition and break the cycle of poor technology decisions. Common approaches to data and systems architecture will make it easier to upgrade and switch systems; improved procurement and contracts will make switching more efficient and enable more strategic conversations with suppliers; and best practice standards for housing services will make it easier for new suppliers to enter the market, knowing the needs of their users up front.

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1 Context

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Purpose of this project

This is a foundational discovery project

A new approach to housing technology

The London Borough of Redbridge, and a collection of supporting local authorities, want to better understand the market for housing services technology in the UK and whether it is working for social landlords.

With funding from the Department for Levelling Up, Housing & Communities (DLUHC) Local Digital Fund, the aim of this discovery project is to:

• determine the extent to which supplier “lock-in” is adversely affecting LAs and HAs;
• explore the case for central government intervening in �the market;
• identify the highest potential value interventions; and
• highlight the conditions they will need in place to make any intervention successful.

This discovery is an opportunity to help social landlords get better value for money from their housing technology solutions.

There is a desire from the sector to improve how LAs and HAs work with technology suppliers. This project builds on previous work by LOTI and HACT to support more innovative procurement and the effective use of housing services data. It also compliments another Local Digital Fund project (led by Hackney Council) that will “[explore] how common patterns and standards could unlock flexible, affordable innovation leading to improved outcomes”.

The outputs from these two discovery projects will provide the evidence base for making an overall recommendation to DLUHC about possible interventions and central government’s role in facilitating them.

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This report

We have structured this report as follows:

• This section provides context and the background of the problem
• Section 2 contains our user research, explaining our key insights and how these combine to lead to supplier lock-in.
• Section 3 describes housing technology, core functionality of this technology and outlines the main players in the market.
• Section 4 details key characteristics of the housing technology market, purchasing trends over the past decade, and considers the extent to which market outcomes may be indicative of supplier lock-in.
• Section 5 sets out a future vision for the housing technology market, identifying key changes and how these could enable a more dynamic and innovative market for both buyers and sellers.
• Section 6 considers the case for change, summarising how well the market is working and the reasons for possible central government intervention.
• Section 7 identifies potential interventions and sets out our recommendations for DLUHC
• Section 8 sets out what DLUHC should do next, and further work needed.

Details of our research sources and synthesised desk-based research findings are set out in the Appendix.

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Context

Social housing is an essential part of the UK housing system and levelling-up agenda

Social landlords are under significant, and increasing pressure

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Nearly 1 in 5 households in England currently live in social housing.¹ Its provision is crucial to ensuring many vulnerable groups, including low-income families, elderly, people with disabilities and those experiencing homelessness, have access to a decent and affordable place to call home.

Social housing is provided by local authority (LA) landlords and private registered providers (such as not-for-profit housing associations (HA), co-operatives , and for-profit organisations). Combined, the sector owns 4.4 million homes across England.²

A secure home is foundational for economic prosperity. Without it, health and wellbeing, and access to work is severely impacted. With it, outcomes for families are greatly enhanced.

There are over 1 million households waiting for social housing.³ �1 in 10 households have been on LA waiting lists for more than 5 years, with tens of thousands waiting 10 or more years for social housing in some of areas of the country.⁴

Despite the clear socioeconomic benefits of secure and affordable housing, this deficit has emerged against the backdrop of:⁵

• a decline in the number of social houses built
• almost 8 million people in England having some form of housing need
• a rise in overcrowding by renters
• poor quality homes costing the NHS £2 billion.⁶

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1 DLUHC: Live tables on dwelling stock (including vacants) — Table 100

2 Regulatory of Social Housing (2022): Registered provider social housing in England - stock and rents

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3 pragmatix advisory (2021): Building post-pandemic prosperity

4 Ibid.

5 Shelter (web accessed May 2023): Social housing deficit

6 pragmatix advisory (2021)

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Technology should help

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Technology has been hailed as a transformative, disruptive agent in our daily lives, changing old processes and making us more efficient and effective.

In social housing too, technology has the potential to speed up processes, to enable smooth handovers between services, and bring key information to the hands of decision makers.

At a basic level, technology should give social landlords an up-to-date, single source of truth on all their housing stock, who lives there, and the assets in those properties. They should be able to schedule repairs work, see job costs, and make sure they have the right equipment and materials in stock. Those in need of housing should be able to plan their lives with knowledge of when they’re likely to secure housing. And residents should be able to easily report issues, get updates and stay in touch with their landlord.

In 2023, with the rapid advances that we have seen in technology elsewhere, technology for social housing should go further than this. LAs and HAs should be able to explore more innovative technologies, such as predictive analytics to plan for likely breakages and spot patterns in stock failure; using AI to help diagnose repairs; and smart sensors to monitor damp in homes.

But they can’t.

Too often the technology used by LAs and HAs for their housing services does not always meet their needs or live up to the valid expectations of users. The reasons for this are complex, and understanding them in the context of the public housing system is the subject of this project.

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Predictive analytics

Smart sensors

AI Chat

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This is a service where residents could get real value from having housing officers sit down with them, rather than just allocating them a home. Any way we can get housing officers to spend more time with people and less time faffing with technology, the better.”

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Head of Tech, Local Authority

Is supplier lock-in a problem?

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The market for housing technology is dominated by a handful of large suppliers who have been in the sector for many years.

These suppliers have developed comprehensive, full-suite Housing Management Systems (HMS) as well as product offerings across the range of local government services. These early entrants supported LAs to move away from paper-based and spreadsheet-based systems, while helping them manage evolving compliance, legal and audit requirements.

After the initial introduction of this software, many LAs stayed with the same original supplier and even the same product. They have often not upgraded their systems or the infrastructure holding them.

Over the last decade, this has resulted in the tools used by LAs - which may once have been best-in-class - falling behind technology best practices and becoming “legacy” systems.

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While some LAs have become increasingly dissatisfied with these legacy HMS, they have found it difficult to move away from their old systems to new suppliers or upgrade onto new products from the same supplier, even when there is keen interest from staff to explore alternatives and emerging technology. Many LAs feel that they are “locked in” to their current systems and suppliers.

Other companies have entered the market with innovative products that embrace human-centered design principles. However, many LAs do not feel like these are viable alternatives to the established suppliers. None are considered to offer a competitive advantage on the core, back-end functionality required to manage their housing stock and tenants.⁷

Supplier lock-in appears to be a sector-wide problem, and only by understanding the causes for this market failure - from procurement practices, buyer risk appetites, regulatory pressures, workforce challenges and supplier behaviours - can we hope to improve the system for the better of residents and staff.

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7 LOTI (2020): First Steps Towards More Innovative Procurement of Housing Services Technology

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2 User research

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This section looks at how people feel about housing technology, the pain points for staff and residents, and the underlying causes of these challenges.

• First, we outline our assumptions and approach to hypothesis-led research
• We summarise the user journey for housing services
• We dive into the technology challenges for LAs
• And finally, we look at cultural and relationship causes for supplier lock-in

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Assumptions

We believe that Local Authorities are unable to change technology providers as the result of low market competition and deliberate retention strategies from suppliers.

We believe that negative resident and staff housing journeys experiences are the result of bad technology and systems that are not designed with their users in mind.

We then had an assumption on why Local Authorities are locked in with bad technology.

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We understood that bad housing management technology was the root cause of negative residents and staff housing experiences, so we formed an hypothesis.

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Case studies on social housing services projects from 16 UK councils to understand the end-to-end residents and staff pain points

aggregators of public contracts to analyse market characteristics in public tender competition

Through user and desk research we set out to validate these assumptions, collect more detailed information about the unmet needs in social housing services and the cost to taxpayers from “business as usual”, and build a picture of the broader housing management tech market. Finally, we facilitated an ideation workshop with small group of local authorities to co-design possible interventions to address the concerns with current housing technology market.

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supplier websites and case studies to gain a better understanding of the current housing technology landscape.

1:1 interviews

& surveys

Limitations

We conducted extensive online desktop research to build a clear picture of the housing tech market and its suppliers.

Interviews were approximately 1 hour long and were conducted online.

Housing associations were not represented as we chose to focus on local authorities. HAs have different characteristics and given our limited time we did not delve into these.

LAs were not fully representative of the variation in geography, size and demographics. We invited a diverse group of LAs to participate, but were limited by uptake.

Residents were not included directly in our user research but only through our meta-analysis of past case studies. We used staff knowledge to partially validate our assumptions on residents.

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Local authorities�Redbridge, Newham, Lancaster, Luton, Kensington & Chelsea, Babergh Mid Suffolk, Rushmoor

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HM tech suppliers �NEC, Capita

A survey with Local authorities was used to broaden and refine our understanding of buyer-supplier relationship shared on digital platforms/channels

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100+

Desktop research

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SOCIAL HOUSING AS A SERVICE - What makes a bad housing service experience?

As tenant of social housing, I need to…

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In all cases, LAs…

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Find the information I need quickly so I can learn about my eligibility and find a place to sleep

reaching out to the council via phone is time-consuming.

Register with social housing so I can apply for social housing.

�Send eligibility documentation.�

Residents feel confused and unsupported at a very vulnerable time/ make ill-informed decisions to stay in temporary accommodation

Homeless team dealing with overload of requests via phone and unable to give the appropriate advice

Quickly and easily access my online tenant portal to pay my rent.

As a staff member I need to check tenants’ rent statements so I don’t have to chase residents and easily update data in the system

Residents take longer to find accommodation than needed and suffer socially and economically for it.

Housing team manually collect residents’ information; can’t access property info and provide them to applicants

Residents can’t pay their rent online

Rent collection team relies on manual payment-related tasks; data security and integrity issues

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Quickly and easily raise a repair request so that I can have my problem fixed. Need to know if the council is dealing with my request so I can be at home when the operative comes

Residents don’t get their problem fixed for weeks

Repair team works in an emergency-led way

Notify the council about my intent of leaving the house so that I can end my tenancy in time.

Allow the inspector access to my house so that the housing team can rent the property again

Properties stay empty for long periods due to competing priorities and lack of coordination among housing teams

…spend more time and money than needed to operate their services, through failure demand, by managing cases that would go elsewhere for support if they knew they had such low odds of receiving housing support, by paying for licenses they do not use, and in extreme cases, by suffering cyber attacks made possible through operating on outdated systems.

KEY LEARNINGS

Our �learnings

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Underlying causes of pain points

Technology

LAs cultural legacy

Supplier relationship and market dynamics

Through interviews we discovered that there are 3 main underlying factors that lead to bad technology and vendor lock-in, which in turn contribute to negative housing service experiences and outcomes.

Lack of adequate digital infrastructure like open APIs, cloud infrastructure, common data architecture, and missed upgrades are the main reasons why Local Authorities are stuck with technologies that don’t meet their users’ needs. Inadequate functionality lead LAs to invest into custom development and integrations which further limit them from being able to upgrade or switch system.

Councils have often had transactional relationships with their suppliers and haven’t engaged strategically across the product lifecycle. Suppliers have provided limited support with upgrades, custom features and integrations. Councils limited digital and IT expertise in-house has also made managing more microservices less feasible than buying an end-to-end product.

Council procurement and digital culture is also a significant contributor to why they stay with underperforming systems. LA teams are risk averse, and often miscalculate the risk of remaining with a familiar, failing system over adopting something new. Likewise, standard procurement practices rule out many emergent products just because they are new and cannot therefore have the track record sought by buyers.

KEY LEARNINGS

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Multiple systems used to run housing services

Old versions in use for over 20 years

LA uses multiple housing management systems to run their services and accomplish tasks. They bought Northgate OHMS 20 years ago which is used for rents, repairs, voids mgt. On top of that its teams uses Total repairs, Civica and KyCloud to deliver other services. Systems run on very old versions.

Running processes is resource-heavy. Systems hardly integrate with each other and use different data formats. Staff struggle to find the data needed or convert them for other uses. As a result they have developed manual workarounds. Usability is poor and they waste time finding the information they need.

Systems are designed to accomplish certain tasks and not to reflect residents end-to-end journey or staff's workflows. Because of these deficiencies and of the lack of integrations, over the years the councils has invested in-house resources to develop custom integrations and functionalities.

Northgate has released an upgrade. All systems are running on older versions and as the IT team fears that upgrading Northgate will disrupt their custom integrations. They ask Northgate for support but they don’t receive any so they decide not to upgrade in order to avoid disruption.

The council wants to switch HMS provider. They go to existing suppliers stating their needs and checking which systems cover the processes and functions they need. They also speak to other councils. The entire procurement is resource intensive and the council doesn't have the resources to do proper research.

They struggle to find a system that aligns with their functions, ways of working and policies. They look for ease of custom development to be able to integrate with other systems in future. The contract isn't fully transparent: things like API coverage aren't clear. Although there are alternatives on the market, the council is reluctant to choose untested options

Given the council's limited budget and the limited market's options, they decide to choose the systems that cover most functions knowing they will have to invest in custom integrations.

Implementing the new system can take up to 2 years.

Summary

Tech

barriers

Market/ Suppliers’ relationship

Every supplier was failing until 5 years ago. The market was starting to looking at enterprise. Buyer-supplier relationships were very transactional

APIs coverage isn't very transparent. While suppliers say they have open APIs, their coverage is limited or they are badly documented

Over the years, systems have improved but lack of upgrade by councils means they miss out on products improvements such as better usability or functionalities

Suppliers are unable to provide support to systems that have been customised.

Lack of process standardisation contributes to limiting suppliers' support

Although alternative options to big housing management tech systems’ suppliers are available, councils’ lack of resources prevents them from trying solutions that lack evidence of being tested by other buyers

Councils can’t rely on systems meeting their needs so have to itemise their requirements and carefully check each option would satisfy basic functions of the service.

Cost and time of transitioning contributes to vendor lock-in

Quote

First HMS purchase

Running services

Develop bespoke functionalities

Upgrading

Decide to switch

Procurement

Contract

Lack of systems integration

No common data architecture

Lack of open or clear APIs

Poor systems usability

Resources invested bespoke integrations & functionalities

Difficult to maintain & support custom development

Lack of custom support

Barrier to upgrade as it may disrupt custom integrations

Limited supplier's support

with upgrade

Lack of innovation

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Lack of IT resources

Procurement process is resource intensive

Risk aversion

Lack of engagement/ collaboration

with suppliers

Implementing new systems

can take years

"Suppliers weren’t supporting the market. Relationships became very transactional — e.g. can you give me 10% discount, we can give you 5%, great, we’ll see you next year then." NEC

“Upgrades take time and anything bespoke has to be retested. Shifting to cloud hosting would mean redoing all the integrations between systems. Any change can be months of work" Programme Manager at LA

"Suppliers are known for selling their products cheap and I suspect LAs have caused that by wanting their products cheap. I don’t see an incentive for a new company to come in" Digital Manager at LA

"It’s not just about openness of APIs but their coverage. Supplier may say they provide APIs but it is not entirely clear what they cover in their contracts” Housing tech manager at LA

“They know you won’t move away from them because they know councils don’t have the resources to do so and develop something or risk with untested options.” Digital Manager at LA

HMS PROCUREMENT JOURNEY

Poor systems usability

Impact

• Critical information is hard to find resulting in increased staff workload and service delays
• Manual workarounds for processes lead to increased security challenges and unreliable data
• Limited residents’ self-serve functionalities prevents channel shift meaning LAs must continue to support expensive phone lines
• LAs sometimes build custom features to make up for missing functionality, which are difficult to support and cause barriers to change

Summary and underlying causes

Our research confirmed that staff and residents find their systems and online interfaces difficult to navigate, which makes it difficult to find information and data when needed. They have poor UX, missing features and do not match end-to-end services or staff workflows.

The systems in use are often old versions which have since been discontinued or have new versions available. This poor usability is therefore ultimately caused by LAs not upgrading to newer versions of their systems and not moving to new products once older ones are discontinued.

“We are heavily reliant on emails, spreadsheets and manual workarounds, especially for repairs and maintenance and case management. Systems simply don’t reflect our staff’s workflows and so they find other ways to input information”

Housing Systems Manager at a Local Authority

TECHNOLOGY

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Limited integration and �data silos

Summary and underlying causes

Different systems used to run different services require custom integrations to work together.

Limited systems’ integration are largely due to APIs that are hard to access either because they are badly documented or expensive. When available, their coverage is limited and there is little to no support from suppliers.

Lack of systems’ integration result in difficulty accessing data access and converting and transferring it across systems due to mismatching data formats.

Impact

• Bespoke development: LAs tend to choose the system that “ticks the most boxes” and then invest resources into custom development and integration which is resource intensive
• Siloed data: staff can’t easily access data and move them across the systems in use, which increases manual workarounds
• Limited suppliers’ support due to custom development
• Siloed working
• Overall disrupted service experience

“If systems are not well-integrated you can’t even see if residents have paid their rent.”

Head of IT and Digital at a Local Authority

“It’s difficult to integrate with compliance solutions. like gas safety. We would need more modules to meet our needs.”

Housing Systems Manager at a Local Authority

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TECHNOLOGY

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There are barriers to upgrade and switch systems

Impact

• Usability remains poor, negatively affecting staff and residents experiences
• Councils are unable to leverage benefits of up-to-date software packages
• Increased security risks
• Staff focused on running integrations and missing out on potential innovations
• Lack of or limited suppliers’ support with outdated systems version

Summary and underlying causes

Systems upgrades are essential to benefit from new functionality, increased security and improved workflows.

Bespoke development and integrations are a major cause of missed upgrades as these may disrupt custom integrations and suppliers are unable to provide support for features they did not build.

Upgrading is resource intensive as new versions need to be thoroughly tested by staff and may be significantly different.

Time and cost of implementing a new system represents a significant barrier.

Increasingly, physical infrastructure also poses as barrier as new versions may only be available on the cloud or for newer servers or operating systems.

“We had no guarantee that upgrading the system would have worked with the other systems or that we could have received any support if anything had gone wrong.”

Housing Systems Manager at a Local Authority

“It takes four or five years to change a system… This is the 21st century!

Housing Systems Manager at a Local Authority

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TECHNOLOGY

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Councils are risk-averse and unwilling to choose untested solutions

LAs perceive there to be limited options available for them. As our desktop research shows in the next section, there are multiple housing tech products available on the market. Yet we found that councils are generally less willing to choose products that have not already been used by other LAs.

We saw that LAs are highly risk averse, with such a strong preference for tried-and-tested suppliers that they would ignore a poor performance record as long as they know that they are not the only LA using that supplier.

Such attitude is the result of a series of factors. Risk aversion stems from limited financial resources to invest in IT products combined with procurement being resource-intensive and the high public profile of LA failures.

The combination of these factors has contributed to make Local Authorities more reluctant to take risks therefore making more difficult to move away from their main tech suppliers.

“Civica was the best available option among many. Other options were available but suppliers openly admitted that their softwares were not in use in any other council, so the team didn’t have the confidence to take the risk.”

Head of IT and Digital at a Local Authority

LAS CULTURAL LEGACY

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Poor relationships with suppliers lead to lack of strategic planning for housing technology

Procurement barriers along with a constant focus on cost saving has led to a situation where relationships between LAs and suppliers have become more transactional and less collaborative. We heard from both suppliers and LAs that the relationships had been poor, and suppliers were also keen to change this situation and move to more of a partnership model.

We heard that procurement is resource intensive and that staff lack the proper expertise to do the research to find the best products that meet their needs. Procurement has therefore focused on cost rather than on functionality.

Due to this insight, in the next sections we explore challenger suppliers on the market and confirm that there are a number of available alternatives. We also look at market characteristics to understand in more detail why these other suppliers are getting a low proportion of the work.

“I think one of the big problems is the time and resources it takes to do procurement. You run out of time to do a proper open tender and so tend to go down the less time and cost-requiring option. The vendor usually has a particular team to sell you the product but that’s not the team you will work with and so there is little or no interest to engage with you.”

Programme Manager at a Local Authority

SUPPLIER RELATIONSHIP AND MARKET DYNAMICS

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Housing Mgt System

Organisation

Vendor lock-in

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3 Housing technology

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This section looks at housing technology systems and what is available on the market.

• First, we look at the breadth of the current market.�Contrary to LA’s perception of limited competition for housing technology, our research suggests that there are many available products to choose from.
• Then we examine bid data for housing service contracts�These data confirm that, despite the variety of vendors and products available, LAs overwhelmingly choose just three suppliers for new contracts.

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Do LAs have alternatives?

However, the market is more varied than it first appears.

There are other suppliers with full HMS and there are also a host of smaller suppliers with niche offerings that aim to support single product verticals, such as the repairs journey.

The LOTI work considered six suppliers to count as “incumbent HMS”, which should already provide a reasonable amount of competition. Our analysis covered 80 housing technology products targeted at social landlords for different parts of the housing service. Our full list of suppliers is included in the appendix.

All suppliers acknowledge the challenges faced by the social housing sector and advocate for the power of technology to transform these services and improve the resident experience.

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LAs repeatedly told us that there are limited options available for them in housing technology.

There is a strong perception that the market is limited to a few large suppliers and that only those suppliers offer technology systems that will work within the LA context. We looked at the market and drew on past work by LOTI to examine this belief.

There are three primary suppliers of technology for managing Local Authority housing services: NEC Software Solutions, Capita and Civica.

These suppliers have established offerings that sit across the whole housing journey. They have comprehensive Housing Management Systems (HMS), with modules available on everything from allocation to repairs reporting.

These three also offer solutions for other areas of local government services, making them household names within the sector.

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Makeup of the market

Comprehensive solutions

Goal: Support the end-to-end journey and full complexity of services. Suppliers provide a core housing management system with additional optional modules or add-ons to extend functionality.

Primary features:

• Asset and stock management - housing stock, capital investment, compliance
• Case/tenancy management - housing register, resident portals, tenancy management, homelessness
• Financial account management - income (rents, service charges and arrears) and accounts payable
• Incident management - complaints, repairs
• Booking and scheduling management - mobile workforce management, scheduling, workflow

Examples: OmniLedger PyramidG2 Housing Management, Hallnet Active Portal, MIS Active, Capita Housing Software, Cx Housing, NEC Housing Management, MRI Social Housing Management Software

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Platform-as-a-Service solutions

Goal: Build out solutions incrementally, drawing on platform efficiency and scalability whilst maximising flexible configuration. Often with Dynamics 365 or low code platforms.

Primary features: Case & asset management, rent accounting, repairs & maintenance

Examples: Datb Local Gov Platform, Redkite CRM, Infinity Group’s Microsoft Dynamics 365 for Housing Associations and E&F Solutions’ #D365 for Housing

Resident Experience solutions

Goal: Support the end-to-end journey by improving the resident experience and integrating with underlying systems.

Primary features: content management for self-serve experiences, live /AI chat, apps, integration services, incident workflow

Examples: Self-serve Portal by Aareon, Optus, Granicus govService, ieg4’s Digital Housing, VerseOne

Single vertical solutions

Goal: Support a single product vertical within the housing journey. A particular focus is the repairs, maintenance & compliance journey due to its complexity.

Primary features: Mobile workforce management, scheduling, forms, workflow, IoT-based building monitoring, asset management, contractor listings

Examples: PIMSS Asset Management, Plentific, MadeTech Repairs, Advanced Field Service Management, Safecility

Data-first solutions

Goal: Support services to harness insight from legacy business systems and remove silos.

Primary features: Extract, Transform and Load (ETL), data validation and enrichment, data reporting and analytics

Examples: Housemark, illumar

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Competition is a two-supplier race

Despite the variety available in the market, NEC and Civica won over half of all competitive tenders for housing technology solutions since January 2015.

Of 122 contracts for housing technology solutions, NEC (Northgate) and Civica were awarded 55% of them - and when Aareon is also included, this accounts for 68% or nearly ¾ of all competitive tenders.

• Civica has been awarded slightly more contracts overall (36) compared to Northgate (31)
• The total value of the contracts awarded to NEC (£31.0 million) is however significantly greater than Civica (£23.2 million)
• Aareon is a (very) distant third, winning 16 contracts worth a combined total of £8.6 million, mostly before 2019.

The remaining 23 suppliers who have won competitive tenders have all been awarded between 1 and 4 public contracts each. The combined value of these awards is only slightly more (1%) than NEC’s market share.

Capita is notably absent. Despite being a major supplier of housing technology for LAs, Capita has not been winning new contracts — but their systems are still used by a large number of LAs. We spoke to a representative from Capita who explained they haven’t focussed on winning new contracts with LAs while: (a) they develop a new end-to-end solution; and (b) implement a consolidation strategy across the organisation’s offerings.

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Source: TPX analysis, data retrieved from Contracts Advance

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4 Market characteristics

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This section looks at how the housing technology market works, key characteristics and market outcomes.

• First, we outline how LAs and HAs buy housing technology solutions, the key factors they consider when choosing between technology suppliers, and purchasing trends over the past 8 years.
• Second, we summarise the key characteristics of the housing technology market and how they influence competition and supplier lock-in

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Buying technology solutions

Competitive tenders

There are a limited number of ways social landlords can purchase housing technology solutions. Local Authority procurement processes are regulated by the Public Contracts Regulations 2015 (PCR 2015). Under the PCR 2015, LAs are required to follow a set of procurement rules when purchasing goods, services or work. These rules can vary depending on the value of the contract being awarded and the type of goods and services being procured.⁸

To buy new housing technology solutions, LAs are usually required to undertake a competitive tender process. At a minimum, this means the contract needs to be advertised on Contracts Finder, with clearly set out criteria for supplier selection and evaluation. The use of government frameworks can, in some circumstances, streamline the procurement process by restricting tenders to pre-approved suppliers with agreed contract terms and conditions.

Often to tender or quote for contracts, suppliers may also need to meet LA-specific requirements, for example evidence of financial stability, appropriate insurance levels and compliance with relevant legislation. We heard from suppliers that LA requirements are sometimes so specific and detailed the tender process can become a box-ticking exercise with little room for supplier-led innovation.

Housing Associations and other private registered providers (PRPs) aren’t subject to the same regulatory requirements. This means they have greater flexibility in how they purchase their housing technology solutions. For example, we estimate that only 17.4% of PRPs advertised a contract on Contracts Finder, with the vast majority instead appearing to either purchase from the supplier directly or running a closed tender process.⁹

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9 TPXimpact analysis of public contracts. Source: Contracts Advance. See Appendix for further details on our research approach.

8 Current threshold values (as at December 2021) can be accessed here. For housing technology contracts, anything above £138,760 is subject to the full suite of PCR 2015 regulations.

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Contracts with suppliers

LAs and HAs can have various types of contracts with technology suppliers. Committed spend and framework agreements are most common for core technology solutions, while pay-as-you-go (PAYG) agreements are sometimes used for smaller, single vertical solutions.

The most common contract lengths appear to be 3-5 years. Spending commitments and agreements tend to be longer for higher value contracts. For example, based on our analysis of the public contracts data, we estimate:

• only 9% of supplier revenue is generated from spending commitments and agreements lasting 1-2 years
• 45% of supplier revenue is generated from spending commitments and agreements lasting 5+ years

Housing technology purchases from the large legacy suppliers are sometimes bundled with other digital and technology services as part of a wider contract for the entire organisation.

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Buying technology solutions

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Source: TPX analysis, data retrieved from Contracts Advance

It is common for housing technology contracts include an option for renewal. Several LAs we spoke to reported that the original contract with their technology supplier was over 10 years old. As a result, there appears to only be only a small number of competitive tenders each year.

33

Pricing

Between January 2015 and April 2023, we identified 122 public contracts awarded to suppliers of housing technology solutions. On average, approx. 17 contracts were awarded annually.

​

Buying technology solutions

​

Source: TPX analysis, data retrieved from Contracts Advance

We also heard from both LAs and technology suppliers how the user-supplier relationship had become very transactional, with contract renewals focused on cost savings and spending discounts, rather than opportunities to support strategic objectives and service transformation. One supplier summarised these conversations as:

[LA]: Can you give me a 10% discount?

[Supplier]: We can give you 5%

[LA]: OK great.

[Supplier]: See you next year then

Technology suppliers will typically charge a license fee for purchasing a specific module or system. Support & maintenance fees and ad hoc consulting/project work are charged on top of this. We heard from suppliers their preference to charge license fees on a recurring basis, rather than as a one-time payment.

34

There can to be a wide range in the value of contracts with technology suppliers. This variation appears both between different suppliers and within the contracts awarded to a single supplier. Between January 2015 and April 2023, the average contract value wards is £803,000 and the interquartile range is £225,000 and £940,000.

​

​

​

Buying technology solutions

The average per annum spending on housing technology contracts has increased consistently, nearly tripling from £100,100 to £276,460 since 2015.

We heard that the nature of pricing isn’t always well understood by LAs, and that it can be difficult get accurate information from suppliers on future costs.

​

Source: TPX analysis, data retrieved from Contracts Advance

​

Source: TPX analysis, data retrieved from Contracts Advance

35

Choosing technology solutions

Key factors in decision making

​

When choosing between housing technology solutions, we consistently heard from LAs that the most important factor was the extent to which a solution supported their organisation’s processes, policies and ways of working.

Other important factors include:

• Ease of development and integrations: There was unanimous agreement between LAs that custom functionality was required to meet their needs, and that any technology solution needed to seamlessly interface with other systems their organisation used.
• Consolidation: Reducing the size of their “technology estate” and rationalising the number of technology solutions used to support their housing services was often cited by LAs as a key motivation for procuring a new HMS.

​

​

• Reputation and longevity: Having a strong track record of working with similar organisations is considered to be particularly important when selecting a technology supplier to work with. LAs want assurances that suppliers are financially viable and will continue to invest in their product over the medium-long term.
• Security and resilience: LAs are conscious their data is a high-value asset and therefore of particular interest to cyber criminals. The security and resilience arrangements of technology suppliers is a key consideration when choosing between different solutions.
• Regulatory compliance: The evolving regulatory landscape for social housing means LAs need to be confident that a supplier meets all applicable laws and standards, and that they have control of how their data is stored and processed

36

Barriers to change

Choosing technology solutions

We also heard risk appetite among senior leadership, changing IT financial model (i.e. from predominantly CAPEX funded to an OPEX model) and staff resistance to change and as potential barriers to change.

​

​

Time and cost of making the change was consistently identified as the most significant barrier to exercising effective choice in selecting alternative technology solutions. LAs that recently switched their HMS supplier estimated that the procurement process—from deciding to go to competitive tender to releasing tender documents—could take between 1-2 years, and then a further 2-3 years from awarding a contract and implementing the new HMS.

Several LAs described how there needed to be an “appetite for change” before deciding to test the market through competitive tender, and the importance of having someone within the organisation willing to drive this process.

Other significant barriers to effective decision-making include:

• technical difficulties when transferring data to a new system;
• lack of internal staff to implement the change;
• interoperability challenges with other products;
• limited alternatives; and
• need to retrain staff on a new solution

“I think one of the big problems is the time and resources it takes to do procurement. You run out of time to do a proper open tender and so tend to go down the less time and cost-requiring option”.

Programme Manager

37

Market Characteristics

And their influence on competition and supplier lock-in

The market for housing technology is characterised by:

• Multi-year contracts, limited competitive tender opportunities and a concentration of contracts being awarded to only a few suppliers.
• Technical barriers—including: (i) the technical efforts required to set-up a preferred technology solution and customise functionality to LA-specific processes, policies and ways of work; and (ii) the time and costs required to implement a new solution and train staff how to use it—mean LAs often decide it's easier to negotiate contract renewals with their existing supplier
• A trend towards consolidating systems and LAs awarding contracts to suppliers that can provide an end-to-end solution across their housing service.

​

Together, these market characteristics are—at least to some extent—causing supplier lock-in. They have contributed to the transactional relationship between LAs and technology suppliers observed over the past decade, and provided limited incentives for innovation and product development.

The market trend of consolidation—and therefore, larger single contracts—coincides with a renewed investment in the sector by “legacy” suppliers. For example, both NEC and Civica have recently released new housing management systems, and invested 10s of millions into their ongoing development. We heard Capita has delayed releasing its new product, but this also promises to provide social landlords with a single, end-to-end solution.

There is a risk however that this is short-lived; without addressing the technical barriers to change, and all else being equal, LAs are likely to be further locked-in to a single supplier’s ecosystem as they seek to consolidate their housing technology solutions.

​

38

5 The case for change

39

Through this discovery, our aim was to asses whether supplier lock-in was dampening effective competition in the market for housing technology, and contributing to poorer outcomes for LA housing services and their tenants.

Affordable and stable housing is crucial for the government’s levelling-up agenda. When individuals and families have access to decent housing, they can better participate in the labour market, pursue education and training, and take advantage of economic opportunities. Technology solutions increasingly have the potential to help LAs transform their housing services to better support some of the countries most vulnerable groups.

This means that competition concerns in the housing technology market can have wide-ranging effects on potentially millions of UK citizens. Such effects include:

1. Where LAs and other social landlords require additional time and resources just to complete core tasks, they have less capacity to focus on delivering good services and experiences for residents.
2. Limits on switching and innovation can directly affect the quality and ranges of choices LAs have of technology solutions.

We have carried out our assessment by looking in detail at how competition currently works for housing technology solutions, and then examined potential market features contributing to lock-in and how suppliers have responded to these incentives.

This section makes the case for change and why DLUHC should considering intervening in this market.

40

Estimating the cost of BAU

Up to £73 million is being spent p.a.

We estimate between £60 million and £73 million of public money is spent either directly or indirectly on their housing technology solutions each year. For an individual LA, this equates to approx. £354,000 in annual spending.

​

To arrive at these figures, we estimate:¹⁰

• between £19-£40 million is spent p.a. on housing technology licence fees
• ~540 FTE are supporting these solutions across England
• £1.8 million is spent on additional consultant support from technology suppliers
• over 94,000 hours of LA staff time is spent completing tasks that technology should be able to automate.

​

10 For further information on the modelling assumptions,, see our detailed working here.

​

NB: Figure plots central BAU cost estimates. The sensitivity of TPX assumptions can be explored in the linked model.

41

DLUHC can help get better value

Making the case for central government intervention

In our view, LAs should be getting more value from their spending on housing technology solutions. Despite potentially spending over £30 million on licence fees and consulting support, we estimate nearly £15 million of work—that should be supported by technology— requires shadow IT and manual workarounds to complete.

Getting better value from their housing technology is a sector-wide problem to be solved. As we set out in section 4, time and cost is the biggest barrier to change and making effective choices about different technology solutions. This has meant only a limited number of competitive tenders are awarded each year, and LAs often preferring long term contracts with the option for multiple renewals.

While there has been some sizeable investment from legacy providers to develop their technology solutions, and a mutual acknowledgement that the transactional buyer-supplier relationship over the last decade

wasn’t working, there remains a significant risk to the longer-term quality of products when revenues are somewhat guaranteed.

Without intervention:

• LAs may continue to accumulate technology debt, with increasing ownership costs and growing failure risks;
• the easiest option for LAs will be to consolidate their technology solutions, increasing the risk of lock-in with a single supplier; and
• LAs will likely continue to struggle achieving good value for money from their spending on housing technology.

DLUHC is the only stakeholder with the policy and financial levers to overcome these timing and cost challenges, and help LAs get better value from their housing technology solutions.

​

​

​

​

​

42

6 A future vision

43

A future vision

What we’ve learnt

Why do we need a vision?

LAs know that the technology they currently have for housing services is not meeting the needs of residents or staff, in particular suffering from poor resident experience and limited integration leading to data silos.

Yet despite this, LAs have continued to use the same technology. We have heard about barriers to upgrading and switching supplier and perceptions that there is a lack of competition. We have seen that LAs tend to renew their contracts and not upgrade their systems.

We now have seen how characteristics of the market uphold the status quo, that there is limited competition for new contracts, and that LAs are consolidating their systems in the hope that this addresses their pain points, further concentrating technology contracts to only a few suppliers.

For individual LAs to move to better technology, there needs to be a shift in the market. While there are some good challenger products available, various factors are combining to keep the status quo in place. LAs across the country are spending up to £83 million on solutions that aren’t meeting their needs or fit for purpose. To break that status quo, the first step is to have a picture of what we’re trying to achieve instead.

This section therefore lays out a vision for the future of the housing technology market and how this would meet the ultimate goal: good housing technology for all social landlords supporting them to deliver safe housing for all tenants.

44

Needs

Usability

LAs need technology that is easily usable by staff and residents whatever their level of digital maturity. LAs need self-service features for residents in order to drive channel shift and meet resident demand. They need systems to be designed for end-to-end resident services and internal processes, so that key activities stay in the system.

Integration

LAs need technology that can integrate with other systems being used both within the service and across different LA services. They need all services to be able to map data and key information about buildings and residents between systems and have one version of the truth. They need to quickly find key information for compliance and regulatory reporting.

​

​

Ability to change

LAs need to be able to upgrade their systems or switch supplier without risk of compromising service delivery or losing vital data. They need to be able to migrate data between different systems, whether an upgrade or a new solution entirely. They need to be able to carry out a procurement at a reasonable cost and with a high degree of confidence in suppliers to deliver what they are selling.

Choice and competition

LAs need to be able to exercise choice effectively when choosing housing technology. They need to be confident that there are alternative products and suppliers available to them. They need to see a range of options for them to choose from so that they can find a solution that is the best fit for them.

Through the research we have done, the below needs have emerged as key needs for LAs around housing technology.

Technology needs

Market needs

45

Principles for the future

1. Common approaches to shared challenges

By taking common approaches to shared challenges, LAs would enable suppliers to better meet their needs.

Shared standards for core functionality and activities would give LAs confidence that supplier offerings deliver the basics, and allow suppliers to focus on value-adding differentiators.

Shared understanding of data would improve regulatory compliance and make data migration between systems easier.

2. Adaptability to deliver outcomes

LAs, suppliers and the systems need to be open to different ways of working to achieve outcomes.

Suppliers must be able to work alongside one another in an open ecosystem, allowing buyers to choose the best products for each need with confidence that products can co-exist and integrate.

LA processes must be flexible to adapt to different systems, but systems must also be configurable to work in different environments and responsive to changing needs.

3. Joint ownership over systems

LAs and suppliers must both take accountability for their technology.

The relationship between LAs and suppliers must become strategic. Both parties must be proactive at all stages of the procurement and product lifecycle to identify needs of staff and residents and ensure that systems are working effectively and helping LAs to deliver.

A partnership will build trust and confidence on both sides, enabling LAs to experiment and innovate and suppliers to focus on adding real value.

​

46

The future journey

Systems are well integrated and have thorough functionality so systems are used effectively and not worked around

HMS in use

Running services

Configure the system

Upgrading

Decide to switch

Procurement

Contract

Staff have the capability, confidence and tools to configure the workflow to their needs so customisation is rarely needed

Upgrades are applied quickly because LAs know they won’t break functionality

If LAs want to change they know that there are plenty of options on the market to look into

LAs take an outcome-based approach to procurement, staying open to different approaches from suppliers to deliver those outcomes - procurement conversations focus on value-add from different suppliers

Contracts give LAs confidence that if something goes wrong, they are protected

47

7 Interventions

48

Intervening in the market

How can the vision be achieved?

Change will require intentional intervention in the housing technology market through central government measures targeted at either local authorities or technology suppliers.

A wide range of interventions could be used to shift the market to achieve these changes gradually. These interventions could be used individually or in combination.

We explored 10 different themes of potential interventions, each aimed at shifting the market in different ways.

Detailed descriptions of these interventions are included in the appendix.

System Testing

Help buyers test potential new systems for suitability

Common Contracts & Procurement

Standardise to simplify contract negotiation

Procurement Support

Resource provision and collaboration in procurement activities

Common Services & Processes

Reduce variation between buyers

Common Data / Systems Approaches

Common standards for vendors & buyers

League Tables

Identify well performing systems and vendors

Government competitor product

DLUHC-backed HMS solution

Cloud Migration

One-time support for LAs to move legacy on-premises solutions to the cloud

R&D / Challenger Funding

Supporting new products or better feature development

Upgrade / Switching Assistance

Resource provision for switching or upgrading systems

49

Assessing interventions

Impact

• Theory of Change:

How would the intervention lead to change in the housing technology market and how would this lead to better outcomes for housing providers and tenants?

• Potential for unintended consequences:

How might the intervention negatively impact on housing providers, system vendors and tenants?

Taken together we have assigned each intervention a rating of low, medium or high potential impact.

Feasibility

• Technical: How simple is the intervention to implement from technological/practical standpoint?
• Financial: How affordable will it be to achieve the intervention?
• Legal: How much do current legislative powers support applying the intervention?
• Political: How palatable will the intervention be to policy makers, central and local government officers, and voters?

We measured the potential interventions against 6 categories to understand both their potential impact and their feasibility.

50

Assessment of interventions

51

Common approaches

From the long list of interventions, three potential approaches stand out as worthy of further consideration. These are notable for combining a high degree of potential impact with a high degree of feasibility:

• Common contracts / procurement
• Common services and processes
• Common data / systems approaches

These three interventions also exhibit a strong theory of change, focusing on standardisation, which addresses a key current market impediment: barriers to switching or upgrading systems.

We believe that data and systems is the area with the most potential.

Through standardisation and adopting common approaches, we anticipate that local authorities and housing associations will be able to switch provider and upgrade systems more easily.

Standardisation approaches can take a variety of forms from common approaches or best practice guidance, through to minimum standards and enforced regulation.

Ideally, standardisation can enable a more open and fair playing field for vendors and provide a common roadmap for vendors and housing providers. Common approaches make it easier for buyers and suppliers to come together in ways that promote innovation and impactful change.

Additionally, standardised approaches can establish a common foundation that covers the core needs for housing providers and enabling technology suppliers to focus on added value as key market differentiators.

The following slides describe these recommended interventions in more detail, while details on the other potential interventions can be found in the appendix.

52

Intervention:

Common Data / Systems Approaches

​

Common standards for vendors and buyers affecting data and systems structures. �A specific intervention could range from targeting vendors through mandating system operability or data export formats or costs, to targeting LAs with mandatory reporting requirements. Interventions could also be through guidance such as suggested data standards which LAs can choose whether to adopt or frameworks for system modules.

Impact: High

Theory of Change�Standardising data formats/architecture removes a key barrier to upgrading or switching systems through easing data migration and making it easier for suppliers to help LAs to upgrade through simplified and standardised data structures. Improved interoperability would lead to a plug-and-play approach giving LAs/HAs freedom to pick the best systems for individual services/user journeys and making it easier for niche suppliers to enter the market.

Potential for Unintended Consequences�Mandating new approaches by suppliers could drive players out of the market and cause major upgrade and replacement hurdles for legacy systems.

Feasibility: High

Technical: Med �While guidance is straightforward to provide, there is technical complexity in aligning systems to meet this guidance.

Financial: High �Initial project costs will be low and higher implementation costs will fall on suppliers and LAs rather than the intervening authority.

Legal: High �Guidance and standards do not require legal means. Mandatory requirements would be more complex but are likely possible through existing bodies.

Political: Med �Any standardisation can be politically unpalatable but there is some appetite for this in the sector.

Non-financial

Could target either vendors or buyers

Could be either guidance or enforcement

Targets the product design

53

Intervention:

Common Contracts and Procurement Approaches

​

​

Standardise contract frameworks and procurement processes to simplify contract negotiation. In particular give confidence that vendors and buyers have a common understanding and prevent procurement from becoming a lengthy tick-box process, leaving the door open for collaboration and innovative use of technologies.

​

Impact: High

Theory of Change�This intervention seeks to address the power imbalance between housing providers and vendors, through giving LAs greater negotiating power by having common approaches across all LAs. Instead of focusing on exhaustive lists of BAU requirements vendors can focus on innovative ways to add value.

Standard contract requirements would lead to all suppliers having to meet the same minimum standards, such as levels of support, and would strengthen the ability of LAs to hold suppliers to account for breach of contract.

Potential for Unintended Consequences�Additional potential for bureaucratic hurdles and could lead to increased procurement resources rather than the intended consequence of reducing the resources required for this. Additionally this risks placing emphasis on contract minutiae but may not address subjective aspects such as quality of user experience.

Feasibility: High

Technical: High �Standardisation of contracts would not require any technical implementation.

Financial: High �Both initial project costs and implementation costs will be low.

Legal: High �Guidance and standards do not require legal means. Mandatory requirements would be more complex but are likely possible through existing bodies.

Political: Med �Any standardisation can be politically unpalatable but there is some appetite for this in the sector.

Non-financial

Target both vendors and buyers

Could be either guidance or enforcement

Targets the contract

54

Intervention:

Common Services and Processes

​

​

​

Reduce variation between buyers by defining best practice and standardising approaches to housing management. Define patterns for common processes, identifying and describing LA-specific practices, shared LA and HA practices and interfaces with more generic business practices (eg risk management).

​

​

Impact: High

Theory of Change�Standard processes will be well understood, helping vendors to ensure that products meet user needs without having to conform to vagaries between buyers. It will also give buyers confidence that basic functionality is in place so that they can focus on added-value differentiators. Distinguishing between LA-specific, LA-and-HA-shared, and generic business practices will also open up the market through enabling suppliers with more generic products to enter the market knowing that niche needs can be met through other modular product components.

Potential for Unintended Consequences�Standardised approaches may not be desirable for all housing providers without considering factors like size, geographical spread and demographics. Standardising processes may remove space to innovate or optimise, by fixing current practices without being flexible to future changing circumstances or needs.

​

Feasibility: High

Technical: High �Standardisation of services would not directly require technical implementation but there may be some effort in aligning existing systems to new best practices.

Financial: High �Initial project costs will be low and higher implementation costs will fall on suppliers and LAs rather than the intervening authority.

Legal: Med �Guidance would not require legal means and could be provided by existing bodies. Mandatory enforcement would be more difficult or not possible directly.

Political: Med �Any standardisation can be politically unpalatable and there is reluctance in the sector to standardise process.

Non-financial

Target buyers

Could be either guidance or enforcement

Targets the implementation stage

55

8 Next steps

56

This project was the first deep examination into the complex challenge that is modernising social housing management for the better of applicants, residents and staff. There is more to learn to pursue a set of interventions with confidence.

In this section, we list the next steps that will ensure that the systemic challenges are well understood, and highlight starter activities to take forward the interventions from the previous section.

​

57

What would an alpha do first?

Contracts and procurement

1. Identify current incentives for suppliers and buyers in existing procurement standards and examine why existing efforts do not lead to good outcomes
2. Develop theory of change to shift mindsets and procurement approaches to being outcomes based
3. Pilot new procurement and contracts approaches with a small number of LAs and suppliers to check their impact on timelines and outcomes

Data and systems

1. Assess the level of uptake for existing data standards and test ability to meet regulatory reporting requirements through bringing together suppliers and the Regulator for Social Housing
2. Delve deeper into core functionality of housing technology to assess where there are already common approaches to systems architecture
3. Design new frameworks and pilot to understand the feasibility of implementing and updating systems to meet them

Services and processes

1. Test uniqueness of LAs through a gap analysis of service journeys across LAs and HAs to assess level of distinctness and potential for shared approaches
2. Build case for change through talking to challenger suppliers to understand how LA variation impacts product design
3. Pilot new service frameworks with LAs to co-design best practices that work for all LAs

58

Understand remaining challenges

The Competition and Markets Authority would do up to a year of research before intervening in a market, whereas this report represents only eight weeks of work.

There is more to do to give full confidence in these recommendations and prove the case for change and central government intervention in the market.

• Housing Associations�HAs are the bulk of registered providers of social housing, and often work on behalf of LAs who don’t own their own housing. Research should be conducted to capture HA perspectives and the impact of any interventions.
• Suppliers�We engaged with two incumbent HMS suppliers. Further suppliers - both incumbent and challengers - should be engaged to validate the insights and build depth.
• Local Authority data�We used public data on competitive tenders to build a picture of the market, but have limited data on systems still in use that were purchased prior to 2015 and have been renewed, or on systems used by HAs. FOI requests or voluntary reporting could be used to build on this picture.�

59

Build & socialise mission narrative

Our mapping of stakeholders to ‘the system that manages social housing’, and research with housing services staff, made clear that the only stakeholder in the sector at the moment with the resources and convening power to call for new approaches to technology in housing services is DLUHC.

Regardless of whether government were to opt to build a competitor end-to-end housing management system, or intervene to drive existing providers to offer the features, components and integrations councils need, many stakeholders will need to be aligned, and they need a shared goal and shared language to:

• Communicate between them
• Build confidence that the new mission is feasible and should be supported
• Unlock aligned funding from across the sector

This mission narrative should evolve

into a national housing technology strategy

This must be produced, ideally collaboratively, by an organisation with national convening power - the DLUHC Local Digital programme being the obvious candidate for its location in the policy-owning department, its existing network of thousands of local authority digital staff, and its credibility in local government technology challenges.

60

Appendices

61

Housing technology

Appendix 1

Detailed descriptions of tools and functionality available

62

What is a HMS?

Example Housing Management System (HMS) capabilities/modules

Interface with Finance and HR systems

Contact Centre systems

Websites &

Resident portals

IoT devices

Analytics

Incident management components

Complaints

Asset & stock management components

Housing stock

Assets

Compliance

Repairs

Account management components

Leaseholder charges

Contractor payments

Booking management components

Viewings

Repair visits

Case management components

Resident

Tenancy

Homelessness

Payments Gateways

Asbestos

Inspections

63

Housing technology features

Case Management: Capture and manage the primary record of a resident and an associated housing application. This list forms the Housing Register. Case management functionality is also used for homelessness.

Stock and Asset Management: Capture and manage the primary record of properties, capital investment, their contents, presence of asbestos, and compliance data.

Accounts Management: Capture and manage finance data relating to income (rents, service charges and arrears) and accounts payable for maintenance costs and paying contractors.

Incident Management: Workflow and task tracking functionality used in repairs reporting and complaints. Critical tools for the council’s contact centre.

Bookings Management: Schedule and manage appointments for viewings, inspections and maintenance visits.

​

​

Contact Centre: Receive and make contact with residents and other stakeholders - primarily by phone or chat (see below).

Content Management: Manage information and news about housing services, and enable residents to access these.

Resident Portal: Enable residents to check the status of their application, rent balance, upcoming payments, request repairs.

Identity Management: Enable residents to log-in securely to interact with council services.

Chat: Enable two way synchronous messaging, potentially including automated responses.

Forms: Enable residents to share information on applications, complaints, repairs and more. Could also be used by field staff for repairs.

Listings: Provide a view of available properties or contractors for residents to browse.

​

​

Automated calculations: Assign residents to bands based on their application for housing.

Risk analytics: Assess tenant risk of falling into arrears; assess compliance risk of properties.

Matching and allocation: Automatically match residents to properties or trade staff to jobs.

Identity verification: Verify the identity of residents without human intervention.

IoT Monitoring and Diagnostics: Monitor features of properties (energy performance, heat, damp etc.) and flag concerns using Internet of Things sensors and analytics.

Forecasting: Assess future costs and income

Integrations: Enable housing accounting data to be populated in council finance systems automatically; enable 3rd party apps to create, read, update and delete data from core capabilities.

​

​

Core capabilities

Digital experience capabilities

Advanced capabilities

64

*Y = Yes, confirmed; X = unable to identify; ** This refers to the extent to which a solution is customisable. This was assessed based on information available on G-Cloud and supplier websites (High, Medium, Low)

Interventions

Appendix 2

Detailed descriptions of our approach and interventions considered

71

Axes of Intervention

There is a large scope of potential interventions that vary widely in terms of their theoretical impact and the mechanisms by which each intervention could be enacted.

We categorised interventions by where they sit across four different axes:

Financial Weight

What level of financial investment is needed in order

to achieve the intervention

Organisational Target

Which organisations will be directly impacted

by the intervention

Regulatory Weight

How much regulatory enforcement will

the intervention require

Lifecycle Stage

Where along the lifespan of an HMS product or contract

will the intervention have impact?

From

To

Non-financial

Vendors

Guidance

Advertised Products

Money Focused

Buyers

Enforcement

Contract Lifecycle

72

Analysis of Interventions

Financial Intervention

Lifecycle Stage

KEY

​

Regulatory weight:

​

Guidance

​

Enforcement

​

Organisation target:

​

Vendors

​

Buyers

System Testing

Procurement Support

Common Data/Systems Approaches

Government Competitor Product

R&D /Challenger Funding

Common Procurement Approaches

Common Services & Processes

League Tables

Cloud Migration

Upgrade /Switching Assistance

Money-focused

non-financial

Contract length

pre-procurement

73

Intervention:

Common Data / Systems Approaches

​

Common standards for vendors and buyers affecting data and systems structures. �A specific intervention could range from targeting vendors through mandating system operability or data export formats or costs, to targeting LAs with mandatory reporting requirements. Interventions could also be through guidance such as suggested data standards which LAs can choose whether to adopt or frameworks for system modules.

Impact: High

Theory of Change�Standardising data formats/architecture removes a key barrier to upgrading or switching systems through easing data migration and making it easier for suppliers to help LAs to upgrade through simplified and standardised data structures. Improved interoperability would lead to a plug-and-play approach giving LAs/HAs freedom to pick the best systems for individual services/user journeys and making it easier for niche suppliers to enter the market.

Potential for Unintended Consequences�Mandating new approaches by suppliers could drive players out of the market and cause major upgrade and replacement hurdles for legacy systems.

Feasibility: High

Technical: Med �While guidance is straightforward to provide, there is technical complexity in aligning systems to meet this guidance.

Financial: High �Initial project costs will be low and higher implementation costs will fall on suppliers and LAs rather than the intervening authority.

Legal: High �Guidance and standards do not require legal means. Mandatory requirements would be more complex but are likely possible through existing bodies.

Political: Med �Any standardisation can be politically unpalatable but there is some appetite for this in the sector.

Non-financial

Could target either vendors or buyers

Could be either guidance or enforcement

Targets the marketplace

74

Intervention:

Common Contracts and Procurement Approaches

​

​

Standardise contract frameworks and procurement processes to simplify contract negotiation. In particular give confidence that vendors and buyers have a common understanding and prevent procurement from becoming a lengthy tick-box process, leaving the door open for collaboration and innovative use of technologies.

​

Impact: High

Theory of Change�This intervention seeks to address the power imbalance between housing providers and vendors, through giving LAs greater negotiating power by having common approaches across all LAs. Instead of focusing on exhaustive lists of BAU requirements vendors can focus on innovative ways to add value.

Standard contract requirements would lead to all suppliers having to meet the same minimum standards, such as levels of support, and would strengthen the ability of LAs to hold suppliers to account for breach of contract.

Potential for Unintended Consequences�Additional potential for bureaucratic hurdles and could lead to increased procurement resources rather than the intended consequence of reducing the resources required for this. Additionally this risks placing emphasis on contract minutiae but may not address subjective aspects such as quality of user experience.

Feasibility: High

Technical: High �Standardisation of contracts would not require any technical implementation.

Financial: High �Both initial project costs and implementation costs will be low.

Legal: High �Guidance and standards do not require legal means. Mandatory requirements would be more complex but are likely possible through existing bodies.

Political: Med �Any standardisation can be politically unpalatable but there is some appetite for this in the sector.

Non-financial

Targets buyers

Could be either guidance or enforcement

Targets procurement activities

75

Intervention:

Common Services and Processes

​

​

​

Reduce variation between buyers by defining best practice and standardising approaches to housing management. Define patterns for common processes, identifying and describing LA-specific practices, shared LA and HA practices and interfaces with more generic business practices (eg risk management).

​

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Impact: High

Theory of Change�Standard processes will be well understood, helping vendors to ensure that products meet user needs without having to conform to vagaries between buyers. It will also give buyers confidence that basic functionality is in place so that they can focus on added-value differentiators. Distinguishing between LA-specific, LA-and-HA-shared, and generic business practices will also open up the market through enabling suppliers with more generic products to enter the market knowing that niche needs can be met through other modular product components.

Potential for Unintended Consequences�Standardised approaches may not be desirable for all housing providers without considering factors like size, geographical spread and demographics. Standardising processes may remove space to innovate or optimise, by fixing current practices without being flexible to future changing circumstances or needs.

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Feasibility: High

Technical: High �Standardisation of services would not directly require technical implementation but there may be some effort in aligning existing systems to new best practices.

Financial: High �Initial project costs will be low and higher implementation costs will fall on suppliers and LAs rather than the intervening authority.

Legal: Med �Guidance would not require legal means and could be provided by existing bodies. Mandatory enforcement would be more difficult or not possible directly.

Political: Med �Any standardisation can be politically unpalatable and there is reluctance in the sector to standardise process.

Non-financial

Targets buyers

Could be either guidance or enforcement

Targets the implementation stage

76

Intervention:

System Testing

Enable buyers to test different technology more easily. This may be by creating a sandbox environment in which housing providers can try out potential new systems or upgrades without having to commit to full purchase and rollout, or by getting access to demo versions of different tools with dummy data for housing providers to explore.

Impact: Low

Theory of Change

Reduce the risk barrier to trying or implementing a new system by enabling testing for suitability without having to commit to a full procurement or rollout of a system. In particular, testing with dummy data and checking interoperability and functionality with third-party systems used elsewhere by the service and wider organisation.

Potential for Unintended Consequences:

Potential overlap with existing demo-versions offered by some system vendors. Additionally assumes housing providers have capacity and skills necessary for sandbox testing.

Feasibility: Med

Technical: Low �Developing a universal accurate simulation of systems and their interactions is potentially complex and would require development and ongoing support.

Financial: Med �Developing and maintaining this system would require some upfront and ongoing costs.

Legal: High �Offering a testing tool does not require legal intervention.

Political: High �This is a light-touch intervention that doesn’t place additional burdens on either market players or LAs

Non-financial

Targets buyers

Uptake would be optional

Targets procurement activities

77

Intervention:

Procurement Support

Provide assistance to housing providers going through procurement. Strategies could include bringing together housing providers to procure jointly or providing dedicated support teams or other resources to contribute to the procurement process.

Impact: Medium

Theory of Change

Enabling housing providers to act either in a group or with central government assistance addresses the inherent power imbalance with large providers and can enable more effective contract negotiation and support. Providing additional dedicated resources for procurement would give buyers more resources to carry out thorough rather than perfunctory procurement exercises.

Potential for Unintended Consequences:

Collective procurement risks having LAs/HAs tied in to a product that doesn’t meet their needs as well as it meets the needs of other LAs/HAs. Central government involvement also risks adding additional bureaucratic layer to an already arduous process.

Feasibility: Med

Technical: High �This would not require any technical implementation.

Financial: Med �Guidance and collective procurement require ongoing specialist support to be provided to councils going through procurement. A fund or support team would need ongoing input.

Legal: Med �Direct government interaction with procurement processes may involve some grey area complexities regarding competition laws.

Political: Med �Central government involvement in the procurement process could be politically unpalatable.

Non-financial

Targets buyers

Uptake would be optional

Targets procurement activities

78

Intervention:

Government Competitor Product

A central-government backed product replacing or interfacing with comercial systems. Variety of potential approaches including a central database available to all LAs/HAs, a toolbox of open source modules designed to integrate with one another and external systems, or a comprehensive state-backed housing management system.

Impact: Medium

Theory of Change

Drive competition in the market by providing an alternative to the current big-3. In particular with a focus on creating and encouraging use of modular and interoperable approaches that are easier to upgrade or swap-out.

Potential for Unintended Consequences:

At one extreme, a government competitor could drive smaller players out of the marketplace entirely. Alternatively, a government backed competitor that fails to gain traction in the marketplace could become an expensive bauble.

Feasibility: Low

Technical: Med �While providing a baseline product may be straightforward, achieving a comprehensive system with well realised modular interoperability is potentially complex and would require extensive development and ongoing support.

Financial: Low �Developing a competitor product would require a large upfront investment and significant ongoing support development and improvement costs.

Legal: High �There is significant precedent for government-backed systems in the social sector.

Political: Low �A government-backed competitor may be seen as a heavy-handed and expensive intervention that disrupts the market in ways that could negatively impact vendors and buyers alike.

Financial

Targets vendors

Uptake would be optional

Targets the marketplace

79

Intervention:

R&D / Challenger Funding

Research and development funding for suppliers bringing new or updated products to market. Potentially targeted “challenge awards” for vendors bringing new functionality or access to emerging technologies.

Impact: Medium

Theory of Change

Provide should encourage suppliers to actively bring new and innovative technologies and services to market leading to better products for buyers.

Potential for Unintended Consequences:

Potential to favour vendors bringing new technologies to market irrespective of whether these better meet the needs of housing providers.

Feasibility: Low

Technical: High �Providing grants and other funding incentives is technologically straightforward.

Financial: Low �Providing sufficient funding to make potential new products and services will likely be a large financial investment going directly to vendors with no guarantee of positive outcomes down the road.

Legal: Med �Awarding funding is legally straightforward but will likely come under heavy scrutiny by both challenger vendors and market incumbents.

Political: Low �Significant R&D funding presents a significant shift in market influence and risks potential institutional bias.

Financial

Targets vendors

Uptake would be optional

Targets the marketplace

80

Intervention:

League Tables

DLUHC publish guidance information about suppliers in the market. This could take a variety of forms including explicit league tables for supplier performance or a certification/mark of confidence scheme for suppliers.

Impact: Medium

Theory of Change

Increased transparency around vendor performance encouraging vendors to provide high levels of service and support and enabling housing providers to benefit from insights across dozens of HAs/LAs. Buyers should also be reassured about products that perform well in the league tables even if they have not been used by other local authorities.

Potential for Unintended Consequences:

Difficulty in ensuring assessments are accurate and up to date. In many cases housing providers may not be able to act on this information because of other factors influencing vendor choices.

Feasibility: Med

Technical: Low �Achieving reliable reporting data on vendor performance is non-trivial and complicated by the fragmented nature of the market.

Financial: Med �Depending on approach reliable league tables could necessitate central government monitoring and reporting.

Legal: High �Use of league tables is well-established across various areas of government.

Political: Med �The balance of an additional bureaucratic intervention with potentially only minor overall impact may be a hard sell.

Non-financial

Targets vendors

Uptake would be optional

Targets procurement activities

81

Intervention:

Cloud Migration

Either mandating or advising and supporting a migration from on-premises legacy systems to cloud-based systems.

Impact: Medium

Theory of Change

On-premises legacy systems are a significant barrier to upgrades and improvements for many legacy systems. Mandating a shift to cloud-based systems forces a move away from older technologies and reduces some barriers to upgrading and/or shifting systems. Additionally, this removes hardware maintenance from LA/HA IT departments workloads. This should lead to more LAs moving onto newer cloud based systems with better functionality.

Potential for Unintended Consequences:

Mandating shift to cloud services risks significant short to medium term disruption in some cases. This may exacerbate existing issues with vendor lock-in as in many cases the easiest option will be to adopt an existing suppliers cloud-based offering.

Feasibility: Low

Technical: Low �Transferring years or decades old legacy systems to the cloud is technically complex and will require bespoke intervention for individual LAs.

Financial: Low �This is a resource intensive intervention requiring a very large up-front investment.

Legal: High �Providing practical and financial support to LAs is relatively straightforward.

Political: Low �Potentially places a significant burden on central government and risks major disruption simultaneously to dozens of LAs.,

Financial

Targets buyers

Could be either guidance or enforcement

Targets the implementation stage

82

Intervention:

Upgrade /switching assistance

Additional resources and/or support for LAs and HAs to upgrade their systems or switch suppliers.

Impact: Medium

Theory of Change

Reducing the implementation barrier to switching providers by bringing in additional support. Reducing barriers to upgrading and switching suppliers alleviates vendor lock-in and provides incentives for vendors to improve their offerings.

Potential for Unintended Consequences:

Easier switching may not be a solution if buyers still find themselves restricted by other market factors such as limited range of full service providers.

Feasibility: Med

Technical: High �Providing assistance and guidance is technologically straightforward, although there may be additional complexity with older systems.

Financial: Low �This may involve establishing an ongoing specialist central government service on a permanent basis.

Legal: High �Providing assistance and guidance to LAs is legally straightforward.

Political: Med �Biggest barrier may be the limited potential for real-world impact.

Financial

Targets buyers

Uptake would be optional

Targets the implementation stage

83